Longmont officials, acting as the Longmont Urban Renewal Authority, have filed a condemnation petition against Dillard's in Boulder County District Court, asking the court to set a price for the clothing store and allow LURA to take possession of it.

The action, filed Friday, marks the next step in attempts to revive the Twin Peaks Mall. Dillard's, the only mall tenant to own its own building and land, has a covenant that would let it veto much of the proposed $80 million redevelopment; negotiations with the store by first the mall owners and then the city failed to agree on a buyout price.

Condemnation petition

The Longmont City Council found the mall to be a "blighted area" in 2008 and thus qualified for an urban renewal project. To fix the blight, city officials said, the project has to be able to go forward.

"Petitioner has negotiated in good faith with the respondent-landowners in an attempt to acquire the property but has been unable to acquire the property by negotiation," read the petition filed by Robert Duncan and Donald Ostrander, attorneys for LURA. "The just compensation to be paid for the property cannot be agreed upon, and further negotiations would be futile."

The petition lists the owners of record as Dillard's Properties, Inc. and DSS Uniter, LLC.

A separate motion by LURA asks for the court to set a hearing within 20 days to vest title in the property, which would allow the city to take over the property and get the redevelopment started while a price is being decided on. If granted, that would set the hearing on June 6 at the latest.

Dillard's had been negotiating with mall owner NewMark Merrill Mountain States since 2012. In April 2013, both sides acknowledged they had failed to reach a price, either for Dillard's to participate in the mall project or for it to be bought out.

Motion for vesting

At that point, the Longmont City Council (which is also the LURA board) gave its staff permission to enter the negotiations and use eminent domain if necessary. LURA offered Dillard's a $3.6 million buyout; the chain responded with a counter-offer of $5 million -- the same price it had set during the NewMark negotiations.

An assessment by the Boulder County Appraiser's Office, released at the start of May, valued the Dillard's property at about $2.9 million. A separate appraisal contracted by the city in late 2012 assessed the property at $3,030,000.

City officials said that during negotiations, Dillard's said it planned to leave the Longmont market and not be part of the Twin Peaks project.

Dillard's could not be immediately reached for comment.

NewMark hopes to begin demolition this fall and rebuild the mall as "The Village at the Peaks," an outdoor shopping center. Most of the new mall is planned to be open in time for the 2014 holiday shopping season.

If the mall owner hits certain benchmarks, the city will put $27.5 million into the $80 million project, to be repaid by the additional sales and property tax generated by the new mall and by a levy the mall will place on itself.

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